Rich and poor

Profits for the wealthiest on the back of the poorest

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The world’s 1000 mega-rich people recouped their Covid-19 losses within just nine months yet billions will face at least a decade of hardship, reveals a new report. Titled “The Inequality Virus” and published on the opening day of the World Economic Forum’s “Davos Agenda”, the survey of 295 economists from 79 countries, commissioned by international charity Oxfam, reveals that 87 percent of respondents, expect an “increase” or a “major increase” in income inequality in their country as a result of the Covid-19.

According to Forbes the 10 richest people, as of December 31st 2020, have seen their fortunes grow by $540 billion dollars since 18 March 2020. The 10 richest men were listed as: Amazon’s Jeff Bezos, Tesla founder Elon Musk,  LVMH luxury group’s CEO Bernard Arnault and family, Microsoft’s  Bill Gates, Facebook CEO Mark Zuckerberg, Oracle founder and CTO Larry Ellison, legendary investor Warren Buffett, Chinese businessman Zhong Shanshan, Google’s co-founder  Larry Page, and Indian billionaire Mukesh Ambani.

Meanwhile in Europe, the 305 billionaires of the Old Continent have seen their fortunes increase by nearly 500 billion euro since March. Rising inequality means it could take at least 14 times longer for the number of people living in poverty to return to pre-Covid levels than it took for the fortunes of the top 1,000, mostly White male, billionaires to bounce back, the Oxfam report said.

The Kenya-headquartered organization is not the only one sounding the alarm. Severe long-term effects of the Covid-19 could push an additional 207 million people into extreme poverty on top of the current pandemic trajectory, bringing the total to over 1 billion by 2030, according to findings released in December 2020 by the United Nations Development Program (UNDP.)

And the International Labor Organization said wages plunged during the first six months of the 2020 due to the Covid-19, with women and lower paid workers among the biggest losers.  Its report was based on data from 30 major economies in Africa, the Americas, Asia and Europe.

Some economists and analysts viewed Covid-19 as a temporary shock to economic growth, thanks to the experience of China, which has had a sharp V-shaped recession and recovery.  However, for the majority of countries, the economic damage will be more long-lasting leaving permanent scars. On various occasions, the phrase, “Covid-19 does not discriminate” has been repeated.

This, however, is a dangerous myth, sidelining the increased vulnerability of those most economically disadvantaged. As employment and income opportunities fall for the poor, the gap between rich and poor is growing.  The Covid-19 has highlighted the stark inequalities within society, and it will only exacerbate them.